Last Sunday (4/10/2016), the U.S. Postal Service lowered the price of a first class stamp by 2¢, from 49¢ to 47¢ (4 percent). It’s the first drop in price of a first class stamp in more than a century.

And it’s the first time that owners of “forever stamps” will be “under water”—they will be holding stamps they purchased for 49¢ as a hedge against a future increase in the cost of postage, but that is now worth only 47¢.*

Why did the USPS drop the price of a first class stamp?

The USPS didn’t want to drop the price. However, they were ordered to by the Postal Regulatory Commission (PRC). The PRC described the stamp price reduction as being “a rollback” of the price of the past two years when customers had to pay an “exigent surcharge” implemented to help the Postal Service survive the Great Recession.

Postal Service managers are unhappy, arguing the mandated price reduction will add $2 billion in annual losses. Postal Service managers are already asking Congress to cancel the rollback, which generated $4.6 million for operations.

(The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.)

*This applies to stamps with no denomination printed on them. In 2011, all first-class stamps were converted into Forever stamps, meaning they would be valid first class postage, even if the price of a first class stamp increased. In 2015, the concept of Forever stamps was expanded into all other types of postage: stamped-postcards, additional ounce, non-machinable surcharge, two ounce and three ounce, and these stamps have their intended purpose printed on them instead of a denomination.